Risk Management Flashcards
What is risk management?
It is a tool for measuring, analysing and mitigating unexpected events that may or may not occur.
What is a risk?
An event, that if it occurs, could cause the project to fail to meet one or more of its objectives.
What are the aspects of risks?
There two aspects:
- The expected likelihood of it occurring (probability).
- The expected impact if it does occur.
What is an issue?
A risk which has materialised.
What is the purpose of risk management?
To identify potential problems as early as possible so that the opportunity for taking effective action is maximised.
Why is risk management needed in construction?
- Construction projects are usually complex and have targets which need to be met and risks can prevent those targets from being achieved.
- All projects involve risks and project team members are routinely involved in making decisions that have an impact on risk.
- Lastly, whilst not all risks can be avoided, the impact of the risk can be reduced.
What are the stages of risk management?
- Identification.
- Analysis.
- Response.
- Monitor and control.
What is a risk register?
It is a document that schedules the risks associated with a project.
What are some of the most common risks associated with a project?
- External risks such as economic uncertainty, legislation changes and changes in government policy.
- Site risks such as restricted access, planning difficulties and environmental issues.
- Client risks such as lack of experience, post-contract changes and etc.
- Design risks such as incomplete design or lack of design co-ordination.
- Construction risks such as delay in delivery of materials, lack of supply chain management, H&S and availability of resources.
What is a risk register comprised of?
- Risk reference number.
- Description.
- Probability.
- Impact.
- Risk factor/Weighted risk score.
- Response - course of action.
- Risk owner.
- Status - open/closed.
- Comments.
What is the role of the QS in risk management?
- Assist in setting and managing suitable contingency funds.
- Undertake risk analysis to ensure accuracy of funds available & manage their release when no longer required.
- Assist in decision making process by providing estimates with a degree of certainty.
- Provide advice when bidding for work on the level of risk and financial exposure to the company with understanding market conditions and impact on project and rates.
What forms of risk response are available?
- Retention.
- Avoidance.
- Reduction.
- Transfer.
- Share.
What is a monte carlo simulation?
It is a computational risk analysis tool used to predict the possible outcomes of an uncertain event based on historical data and analysing the impact of each.
In doing so, it plots a distribution graph which can either be normal, uniform or triangular.
What are the limitations of using monte carlo simulation?
There are two common challenges with monte carlo simulations:
- It is highly dependent on the information input into the model as it could lead to inaccurate results.
- It may take excessive power to perform the simulation and in doing so, it could take either hours or in some cases days.
What is a risk workshop?
- It is a meeting involving various individuals such as the client, PM, QS, design team, contractor, stakeholders and etc. to share their experience and knowledge in developing a risk plan.
- Considered to be one of the most effective ways of establishing risks on a project as it helps identify what the project is doing and the factors that may affect the success of the project.
